China's COFCO Corp. will break ground in December on 50,000-tonne/year cellulosic ethanol plant in Zhaodong, China; US$156.7M project to be complete in H1 2013

GUANGZHOU, China , September 26, 2011 (press release) – COFCO's first phase of the cellulosic ethanol production line will lay a foundation in Zhaodong, in December 2011.

The first phase of the cellulosic ethanol production line with capacity of 50,000t/a in COFCO Corporation (COFCO) will lay a foundation in Zhaodong, in December 2011, according to Ms. Li, the manager in charge of this production line in COFCO Biochemical Energy (Zhaodong) Co., Ltd. (COFCO Zhaodong), revealing in CCM’s September Issue of Industrial Biotechnology China News.

COFCO, China's largest supplier of diversified products and services in the agribusiness and food industry, invested USD156.7 million in the production line of cellulosic ethanol with capacity of 100,000t/a on July 12, 2011.

Ms. Li claimed that the production line would be launched in the first half of 2013, which means that it would be the first one to achieve the cellulosic ethanol industrialization in China. At present, COFCO Zhaodong, the subsidiary company of COFCO, is in charge of this new production line. The production line of cellulosic ethanol in COFCO Zhaodong had been in the pilot phase with capacity of 500t/a from 2007 to 2011, so as to reduce the cost effectively. So far, the cost of cellulosic ethanol is USD956/t, lower than that of the cost of USD3,134/t in 2006.This huge difference in the cost of cellulosic ethanol mainly depends on the cost of the cellulosic enzyme. In the past few years, how to reduce the cost of cellulosic ethanol production is the bottleneck of the cellulosic ethanol development.

COFCO cooperates with Novozymes on the research of cellulosic enzyme. Thanks to Novozymes, COFCO has a great success in the cost reduction of cellulosic ethanol production at present. Cellulosic enzyme, Novozymes' proprietary, plays an important role in the cost reduction. Celic CTec2, a new product of Novozymes, can not only shorten the fermentation time, but also reduce the outcome of byproducts. Hailong Lin, general manager assistant in COFCO Biochemical Research Institute of R&D Center, disclosed that the cost of cellulosic ethanol was nearly the same as the cost of gas. Furthermore, the thermal value of cellulosic ethanol is 3% lower than that of gasoline, but the combustion efficiency is 1.2% more, according to Mr. Li. It means that the energy generated by 1.018 liter of cellulosic ethanol is equal with the energy of 1 liter of gasoline.

In addition to COFCO, some other companies also seek to get the market share of the cellulosic ethanol industry because of its bright future.

Jilin Alcohol Co., Ltd. (Jilin Alcohol), after a long pilot phase of cellulosic ethanol, will plan to construct a new cellulosic ethanol production line with capacity of 30,000t/a. Although COFCO owns 20% share of Jilin Alcohol, Jilin Alcohol's production line brings pressure to COFCO Zhaodong, according to Ms. Li. This production line will be constructed after the internal discussion at the end of 2011, according to a staff from Jilin Alcohol. Also, Henan Tianguan Alcohol Co., Ltd., one of the COFCO's competitors, has enlarged its capacity from 5,000t/a to 10,000t/a in 2008-2011. In addition to the domestic enterprises, DuPont, one of the biggest transnational companies, seeks the opportunities for cooperation with some domestic companies which have the capability to construct a cellulosic ethanol production line in China.

Therefore, both the domestic companies and internationally renowned enterprises have to face the intense competition in the market of China's cellulosic ethanol industry.

Thanks to cellulosic ethanol's great potential, which can replace the petroleum gradually, the Chinese Central Government and the U.S. Government will launch the relevant policy to support the development of cellulosic ethanol industry.

The Chinese government has repeatedly stressed the importance of cellulosic ethanol industry. Now the Chinese government will increase the investment of R & D in cellulosic ethanol's production technology, in order to speed up the cellulosic ethanol industrialization during 2011-2015, revealed by a expert who participates in the edition of "biomass development in the Twelfth Five -Year Plan".

Moreover, On August 18, the US President Obama declared that the US government planed to invest USD510 million in promoting the development of cellulosic ethanol industry. Under the solid back-up support, there will be great prospects for its development in future.

Not just in terms of environmental protection and energy resources, the development of cellulosic ethanol industry will bring a huge social and economic benefit to China, according to a research report, written by Novozymes and McKinsey.

The cellulosic ethanol industry will not only create 6 million job opportunities in China, but it will also bring USD5 billion revenue from the cellulosic ethanol market. It is reported that cellulosic ethanol will replace 31 million tonnes of gasoline per year, which can reduce 10% of the gasoline import in China. The report believes that China's enterprises will be the main beneficiaries in the cellulosic ethanol value chain, including the construction of the cellulosic ethanol production line in domestic market and the potential international market with value of USD15 billion.

The production technology of fuel ethanol has developed fast during the past 10 years, from grain ethanol in 2001 to cellulosic ethanol in 2011. Cellulosic ethanol, representing a high-end clean energy, can replace the traditional grain ethanol. In fact, Japanese nuclear accident makes people concern more about the development of clean power. People are attracted by cellulosic ethanol because of its advantage of the widespread raw materials without pollution. The development of cellulosic ethanol is urgently needed in China in the future, especially the resources of gasoline that become rare and the serious environmental deterioration.

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